Strong performance helps Direct Line to raise special dividend

INSURANCE COMPANY Direct Line raised its special dividend from last year as strong performance in its motor brands, rising premiums and favourable claims helped it post a 3.6 per cent rise in 2017 operating profit.

Britain’s largest motor insurer, whose brands include Churchill, Green Flag and Privilege, said operating profit from continuing operations rose to £610.9m for the year ended December 31, from £403.5m a year earlier.

Paul Geddes, CEO of Direct Line, said: “We have seen significant growth in our direct own brand policies as more customers respond positively to the many improvements we have made to the business.

“At half year we refreshed our medium term targets and today’s results show we’ve been delivering on our management priorities to maintain revenue growth, reduce expense and commission ratios and deliver underwriting and pricing excellence. “Looking to the future, this success enables us to continue investing in our technology and customer experience, supporting our plans to grow the business whilst improving efficiency.” Gross written premiums for ongoing operations rose 3.6 per cent to £3.39bn in the period, it said. Its motor division grew in-force polices by 3.8 per cent in the year to 4 million and premiums rose 8.5 per cent to £1.67bn. Direct Line added it would pay a special dividend of 15p, up from the 10p it paid a year earlier. The FTSE 100 company achieved a full-year combined operating ratio from continuing operations of 91.8 per cent. A level below 100 per cent indicates an underwriting profit. The average premium paid for motor insurance in Britain jumped 9 per cent in 2017 to the highest level since 2012, the Association of British Insurers said. Premiums rose for most of last year, partly in response to new rules for personal injury claims.